Simmons Corp. can borrow from its bank at 17 percent to take a cash discount. The...
Simmons Corp. can borrow from its bank at 17 percent to take a
cash discount. The terms of the cash discount are 2.5/14, net
40.
a. Compute the cost of not taking the cash
discount. (Use a 360-day year. Do not round intermediate
calculations. Input your final answer as a percent rounded to 2
decimal places.)
Cost of not taking a cash discount.......%
b. Should the firm borrow the funds?
| No | |
| Yes |
Homework Answers
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Simmons Corp. can borrow from its bank at 17 percent to take a
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Regis Clothiers can borrow from its bank at 17 percent to take a cash discount. The terms of the cash discount are 3/19, net 45. a. Compute the cost of not taking the cash discount. (Use a 360-day year. Do not round intermediate calculations. Input your final answer as a percent rounded to 2 decimal places.) Cost of not taking a cash discount % b. Should the firm borrow the funds? Yes No
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